Essential Fintech Reading: April 9-15

Bank of America CFO: "Branches Are Not Going To Be Places Where People Come To Transact"

Big bank earnings season shed a light on just how rapidly mobile banking is growing, reports Pymnts.com. JPMorgan Chase reported annual growth of 19 percent, now boasting 24 million active mobile customers, while Bank of America reported 15 percent growth, with 19.6 million active users. Wells Fargo also hit double digit growth with 17.7 million active mobile customers. Commenting on the company's branch cuts, Bank of America CFO Paul Donofrio said, "I think the branches are not going to be places where people come to transact. They’re going to come for a product they need because something changed in their life." Despite the rise in mobile banking users, mobile wallet payments have been slow to gain traction, making up a minuscule 0.2 percent of total payments made with Bank of America cards.

Lower Income Consumers Set To Benefit In The Future?

Taavet Hinrikus, CEO & co-founder of TransferWise, believes banking will look fundamentally different within five to ten years, with the democratization of finance being the most important outcome for consumers. Observing that "the profits of the banks are overwhelmingly accrued from fees and charges that hit the poorest hardest," Hinrikus adds that "a large proportion of those making transfers are those to whom the average 7.68% cost is a huge burden." As fintech increases its influence, Hinrikus expects "fees charged will no longer be disproportionate to the service." Hinrikus notes that there has already been in a steep decline in the cost of sending international payments over the last five years, driven by new entrants into the marketplace.

Banks Leverage Facebook Messenger To Reach Customers

American Banker's Robert Barba reports that two banks are now allowing customers to contact them through Facebook Messenger, part of a growing movement to meet customers where they reside online. TD Bank is rolling out live chat to its users via Messenger, staffed by people rather than artificial intelligence bots. Bank of America is also working with Messenger. Julie Conroy, a research director at Aite Group, noted that banks using the platform will have to place the proper risk protocols in place. "If someone just wants to do a balance check, you might trust Messenger to authenticate them; if they want to transfer money, a bank will likely take additional [security] steps on the back end," Conroy told American Banker. "One thing we are seeing is fraudsters are escalating attacks on the contact center. This is one very attractive attack vector to do that."

Video Banking's Slow Creep In Adoption

Bryan Yurcan of American Banker writes about BluCurrent's experience with video banking, a little used service in the industry which has nonetheless proven popular with customers. "We thought maybe some of the older members might resist it, but people Skype with their grandkids and they're more comfortable with technology today," said Derek Williams, chief operating officer of the $158 million-asset BluCurrent. Other institutions have experimented with video banking, including SunTrust (which has added video teller machines in some branches), Bank of America and BBVA Compass. "I think overall, you'll see banks start to roll out more video capabilities; it won't be sweeping the nation in the next couple of years, but there will be movement," Javelin's Mark Schwanhausser tells American Banker.